New listings, pending sales and closings were all down in a majority of the counties in the Northwest Multiple Listing Service region, according to the latest market report from NWMLS. Despite this, many brokers in the area say they’re still finding ways to meet their clients’ needs.
While active listings were down 28.6% on a year-over-year basis last month, inventory grew slightly from June to July, rising by 375 to more than 8,200 listings.
Decelerated sales in July also contributed to an increase in the overall housing supply. Inventory grew to 1.76 months, up from 1.55 months in June.
“The overall market velocity is slow in all categories as competition for the few homes listed is high,” said John Deely, executive vice president of operations at Coldwell Banker Bain. “Sellers continue to sit on the sidelines, and demand from buyers has cooled due mostly to rising interest rates.”
According to Freddie Mac, the fixed mortgage rate was 6.9% in July. A year ago, it was 4.99% — and two years ago it was only 2.77%.
“Adding to buyers’ hesitancy is the record-breaking price growth in 2021 and 2022,” Deely added. “Cost pressures are impacting affordability, and it is unlikely to significantly improve in the near future.”
However, JoAnna Harrsion, managing broker at Coldwell Banker Cascade in Wenatchee, suggests there could be a silver lining to this market: median sales prices have fallen in many counties.
“[Some counties are] witnessing sustained demand for their lower-priced properties,” Harrison said, adding that buyers have been expanding their search areas to find more affordably priced homes. “This shift in buyer behavior is creating opportunities in the lower-priced property segment, contributing to the evolving real estate landscape in these areas.”
Meanwhile, Windermere Chief Economist Matthew Gardner says prices in places like King, Pierce and Snohomish counties may have hit a ceiling. “Buyers have taken advantage of these conditions as month-over-month sales prices fell in the tri-county market,” he said.
Dean Rebhuhn, owner at Village Homes and Properties in Woodinville, added that sales are “very active in select areas,” including Southeast Seattle, Beacon Hill, Ballard/Green Lake and North Seattle.
“FHA and VA financing are good options for first-time homebuyers with zero down VA and 3.5% down payment with FHA,” Rebhuhn added. “Some sellers are providing 2-1 mortgage rate buydown to purchasers.”
Another option available to many buyers is USDA financing, says NWMLS board member Frank Leach.
“One bright spot is that almost 60% of Kitsap County qualifies for USDA financing at 4.125% and as low as 1%,” Leach said. “Affordability is being challenged, but it is not lost. More and more buyers are reaching out to use many of these underutilized programs.”